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Water Quality Violations and Avoidance Behavior: Evidence from Bottled Water Consumption

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  • Joshua Graff Zivin
  • Matthew Neidell
  • Wolfram Schlenker

Abstract

In this paper, we examine the impact of poor water quality on avoidance behavior by estimating the change in bottled water purchases in response to drinking water violations. Using data from a national grocery chain matched with water quality violations, we find an increase in bottled water sales of 22 percent from violations due to microorganisms and 17 percent from violations due to elements and chemicals. Back-of-the envelope calculations yield costs of avoidance behavior at roughly $60 million for all nationwide violations in 2005, which likely reflects a significant understatement of the total willingness to pay to eliminate violations.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 16695.

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Date of creation: Jan 2011
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Handle: RePEc:nbr:nberwo:16695

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  1. Shimshack, Jay P. & Ward, Michael B. & Beatty, Timothy K.M., 2007. "Mercury advisories: Information, education, and fish consumption," Journal of Environmental Economics and Management, Elsevier, vol. 53(2), pages 158-179, March.
  2. Olivier Deschênes & Michael Greenstone, 2007. "Climate Change, Mortality, and Adaptation: Evidence from Annual Fluctuations in Weather in the US," NBER Working Papers 13178, National Bureau of Economic Research, Inc.
  3. Wolfram Schlenker & Sofia B. Villas-Boas, 2009. "Consumer and Market Responses to Mad Cow Disease," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 91(4), pages 1140-1152.
  4. Cameron, A. Colin & Gelbach, Jonah B. & Miller, Douglas L., 2011. "Robust Inference With Multiway Clustering," Journal of Business & Economic Statistics, American Statistical Association, vol. 29(2), pages 238-249.
  5. Harrington, Winston & Portney, Paul R., 1987. "Valuing the benefits of health and safety regulation," Journal of Urban Economics, Elsevier, vol. 22(1), pages 101-112, July.
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Cited by:
  1. Nicholas J. Sanders, 2012. "Toxic Assets: How the Housing Market Responds to Environmental Information Shocks," Working Papers 128, Department of Economics, College of William and Mary.
  2. Joshua Graff Zivin & Matthew Neidell, 2013. "Environment, Health, and Human Capital," NBER Working Papers 18935, National Bureau of Economic Research, Inc.
  3. Seo, Misuk & Pape, Andreas Duus, 2011. "Reports of Water Quality Violations induce Consumers to buy Bottled Water," MPRA Paper 28207, University Library of Munich, Germany.
  4. Christopher R. Knittel & Douglas L. Miller & Nicholas J. Sanders, 2011. "Caution, Drivers! Children Present: Traffic, Pollution, and Infant Health," NBER Working Papers 17222, National Bureau of Economic Research, Inc.

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